This Wednesday, Feb. 19, 2014 photo, shows the WhatsApp and Facebook app icons on an iPhone in New York. On Wednesday Facebook announced it is buying mobile messaging service WhatsApp for up to $19 billion in cash and stock. (AP Photo/Karly Domb Sadof)

Photo: Karly Domb Sadof, Associated Press

This Wednesday, Feb. 19, 2014 photo, shows the WhatsApp and...

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Screenshots of Whatsapp's mobile chat app for various platforms.

Photo: Whatsapp

Screenshots of Whatsapp's mobile chat app for various platforms.

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Screenshots of Whatsapp's mobile chat app for various platforms.

Photo: Whatsapp

Screenshots of Whatsapp's mobile chat app for various platforms.

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This Wednesday, Feb. 19, 2014 photo shows the WhatsApp and Facebook app icons on an iPhone in New York. On Wednesday, the world's biggest social networking company announced it is buying mobile messaging service WhatsApp for up to $19 billion in cash and stock. (AP Photo/Patrick Sison)

Facebook is paying a whopping $19 billion in cash and stock to buy mobile messaging company WhatsApp, the social network company said Wednesday.

The deal includes $4 billion in cash and $12 billion in Facebook stock. In addition, WhatsApp's founders and employees will also receive $3 billion in restricted stock units. WhatsApp co-founder and CEO Jan Koum will also join Facebook's board of directors.

The megadeal will make Facebook a major competitor with mobile carriers because WhatsApp has become an alternative messaging service to standard mobile phone SMS texting.

$100 billion business

In justifying the amount of money Facebook is laying out, CEO Mark Zuckerberg told analysts in a conference call that WhatsApp is "on a path to connect 1 billion people," but has already equaled the volume of texts handled by the mobile industry worldwide.

"That's a $100 billion business right now for carriers," Zuckerberg said.

Facebook announced the deal, easily the social network's biggest acquisition, more than an hour after the close of trading on Wall Street. Facebook stock closed at $68.06 per share, but fell by more than 2 percent in after-hours trading.

The deal allows Facebook to swallow one of its primary competitors for the attention of mobile device users.

Mountain View's WhatsApp has more than 450 million users each month, and 70 percent of them are active on any given day, according to a Facebook news release. WhatsApp is adding about 1 million registered users per day.

"WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide," Koum said in a press release.

The deal came together in just 11 days, Zuckerberg said during the conference call. The acquisition comes after Facebook tried to buy ephemeral messaging app Snapchat for $3 billion late last year, but Snapchat spurned the offer.

Facebook pledged to keep WhatsApp operating as a separate entity, the same arrangement that has worked for what is now Zuckerberg's second-biggest acquisition, the photo-sharing app Instagram, which it snatched up for roughly $750 million in 2012.

Zuckerberg said with just 50 employees, WhatsApp has reached a half-billion users in five years, so the company will remain autonomous.

"No one in the history of the world has done that before," he said. "It would be pretty stupid for us to interfere in any big way."

Facebook's own Messenger app and WhatsApp will remain stand-alone applications.

Both Zuckerberg and Koum said WhatsApp would continue its no-advertising policy and instead rely on selling a subscription plan.

"We think that for our product for messaging, advertising is not necessarily the right thing," Koum said.

Avoiding advertising

On the WhatsApp blog, Koum previously laid out his reasons for eschewing advertising, which is Facebook's bread and butter.

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"These days companies know literally everything about you, your friends, your interests, and they use it all to sell ads," Koum said in a post last month. "Remember, when advertising is involved you the user are the product."

Facebook might be interested getting its hands on WhatsApp's hundreds of millions of billing accounts.

WhatsApp has managed to gain users while charging 99 cents annually after a yearlong free trial. Meanwhile, Facebook has struggled to become a full-service spending platform. Persuading large numbers of users to make purchases on Facebook has been one of Zuckerberg's white whales.

WhatsApp will cash in even if the deal doesn't go through. Facebook has agreed to pay WhatsApp $1 billion in cash and $1 billion worth of stock if the merger agreement falls through before it is completed.